Huw Irranca-Davies: This is an important point. Constant attention, constant resourcing and focus is required to turn the situation around. The hon. Gentleman makes a valid point that we must keep up the effort and keep pushing harder. That is true, and hon. Members who have raised that point are pushing at a genuine issue, but we are going in the right direction. We will always have to do more, and when there are instances such as those the hon. Gentleman reports, we must work to address them, but we are pushing in the right direction—and, I must say, doing so for the first time in many years and after decades of underspending in prisons.

David Cameron: I agree with every word that the Prime Minister has just said about Zimbabwe: the clearest possible message should go out that we do not recognise the illegitimate presidency of Robert Mugabe.
	May I join the Prime Minister in paying tribute to Lance Corporal James Johnson and Warrant Officer Second Class Dan Shirley, who were killed in Afghanistan? Their fight in Afghanistan is not just about the stability of that country, but, as the Prime Minister has said, about keeping our streets safe here in Britain.
	Will the Prime Minister confirm what he said on the 42 days vote: that no deals were made, no jobs were offered and no rewards were promised?

Gordon Brown: The right hon. Gentleman forgets that one of the purposes of our policy is that fewer people are in hospital and more care is provided in the community, but I can tell him that real investment in adult mental health places has increased by £1.2 billion, that we spent more than £5.1 billion on adult mental health services last year, compared with only £3 billion in 2001, and that capital spending on mental health hospitals and on hospital accommodation has been rising. Yes, we want to do more, but we can do more only if we invest more in the national health service as a whole. That is our commitment; it is not clear whether it is the commitment of all parties in this House. Engagements

Gordon Brown: There are 5,000 more general practitioners than there were in 1997. More and more general practitioners are able to undertake diagnostic and other services in their own practices, and that will continue with more power to GPs in the years to come. My hon. Friend will also be pleased to know that although this time last year there were fewer than 2,000 matrons in the national health service, today we can report that there are 5,500. That is more than a doubling of the number of matrons, and they have greater control over the cleanliness of hospitals now. So, we are giving matrons, nurses and GPs more power in the national health service, and while the Opposition smirk at that the fact of the matter is that we voted for the national health service and they opposed it.

Philip Hammond: If I were to choose a word to describe the report produced by my noble Friend, it would not be "mad". I would describe it as "extremely interesting and very helpful". Some of the proposals are clearly ones that we will wish to adopt. Others might fall into the category of things that we would love to adopt while recognising that we would be unable to do so because of the mess that the public finances are in and the chaos that we are likely to inherit. It is also fair to say that other proposals do not resonate with my colleagues on the Front Bench.
	We do not need to be coy about this. The job of a party in opposition aspiring to government is to do the work. That involves asking people—including experts and outsiders—to look at issues and to report on them. If we were to create an environment in which, every time the Government or the Opposition asked a third-party organisation or outside body to look at an issue and put forward proposals, and if our political opponents were able to present those proposals as though they were adopted policy, we would simply shut down the debate. I urge the hon. Gentleman not to go down that route.

Philip Hammond: My hon. Friend is absolutely right. He may have been involved in similar discussions to those that I have with many FTSE 500 companies. Most of them have not taken the decision to relocate their tax domicile, but many—perhaps most—of them feel that they are obliged, in the interests of their shareholders, to investigate the options available to them. Just a few months ago I was told by one of the leading firms of accountants that without exception every one of its FTSE 100 clients had asked it for a report on the alternative tax domicile options available to them, because they are conscious that while managements might have preferences—management may prefer to live in leafy parts of the home counties, or play golf on certain courses, or enjoy the cultural attractions of London—increasingly investors, who are global institutions, are asserting their right to have their interests held paramount in the decisions that corporations make. We have to be conscious of that. I hope—in fact I am sure—that the Economic Secretary is conscious every waking hour that corporations, driven by global investors who have no sentiment whatever about domicile, look at these issues in a cold, hard light, and look to locate to the place that offers them the lowest tax rates and the greatest overall advantages.
	After a decade of Labour Government, Britain is a less attractive place to do business than it was, because business taxes are too high and our tax system is too complicated. Thanks to this Government, we now have the longest tax code of any major economy—we overtook India with the Finance Act 2007—and it is expanding the fastest, with the Government, increasingly buffeted by events, endlessly changing and complicating the system in response to short-term political events and budgetary pressures. Unfortunately, the objective of a simpler, fairer, more competitive tax system has been sacrificed to the Treasury's insatiable hunger for cash and unquenchable instinct to micro-manage. Announcement after announcement has been billed as a simplification or as being in the interests of fairness, but turn out to be nothing more than a crude tax grab. Time after time, the rhetoric of the Budget speech is at odds with the reality revealed by even a cursory analysis of the small print of the Budget documentation. We have had many examples of tax initiatives that start life under the green banner—they are introduced under the pretence of being green taxes—but which on closer inspection are simply revenue-raising measures. They discredit taxpayers' notion of green taxes. On top of all that, there is also, of course, the endless stream of stealth taxes. That phrase did not exist 11 years ago, but it has now passed into everyday language and can be found printed almost every day of the week in one newspaper or another.
	There is no sense of strategy or direction. The long-term objective to introduce a 10p starting rate of tax was abandoned for short-term political advantage. Sending a clear signal to business that enterprise will be rewarded through a dedicated lower rate of capital gains tax was also dumped. Both were scrapped without a word of explanation or advance warning. After five or six years of dithering on non-doms, with the problem conveniently lobbed into the long grass, and uncertainty pervading, there was a bungled legislative proposal. Now, there is more uncertainty on income splitting and foreign profits as the Government duck those difficult decisions.
	Uncertainty and complexity both impose a burden on business just as surely as do taxes themselves, but at least taxes benefit the Treasury. Uncertainty and complexity reduce UK competitiveness, increase the costs of managing the tax system and offer absolutely no offsetting benefits at all, unless we consider the employment of accountants to be an offsetting benefit.
	So what is to be done? To help us to answer that question, the shadow Chancellor set up a tax reform commission, which reported at the end of 2006. Following on from that work, he established a working party, led by Lord Howe of Aberavon, a former distinguished Chancellor of the Exchequer, to take forward the tax recommendations that the commission made in the narrow area of reform of the making of tax law. There are five key issues. First, we need to improve the clarity and transparency of the process of tax law-making. Secondly, we need to introduce clear advance signposting of the direction of future changes, especially in business taxation, so that businesses can prepare and the behaviour-influencing capacity of the tax system is maximised.
	Thirdly, we need to restore proper parliamentary scrutiny of tax legislation proposals. Fourthly, we need to institutionalise a simplification agenda, to try to ensure that the process of reducing the complexity and length of Britain's tax code is not dependent on the whim of individual incumbents of the Treasury Bench, but is built into the system. I am not talking about rewriting law just to make it read more easily or to improve the cross-referencing, but about a substantive simplification. Finally, we need to focus on certainty, because that is the No. 1, No. 2 and No. 3 demand of business. Of course businesses would like tax to be lower, regulation to be lessened and the system to be simplified, but anyone who has ever talked to them about the issue will know that above all they want a system that is stable and predictable. They might like to see significant changes to make the system simpler, but I am sure that they would prefer a guarantee that there will be no changes to the system to make it predictable, because that is their No. 1 demand.
	New clause 17 addresses the issue of transparency of process, which is so important to delivering this agenda. Britain is fortunate in that it already has a two-stage budgeting process, which, if it were used sensibly, would offer the opportunity to bring a degree of stability and certainty into the tax law-making system. The pre-Budget report can be used to signal the intentions for the following Budget and new clause 17 would require that all technical changes to tax legislation were published at the time of the pre-Budget report. It would also make provision for Standing Orders to deal with the question of how such technical changes should be scrutinised ahead of the Budget.
	The Chairman of the Treasury Committee, during the course of yesterday's debate, made an impassioned plea to the Financial Secretary for discipline in the way that the pre-Budget report and Budget statements are used. It was a plea for a reversion to the proper purpose of those two reports—and incidentally an implicit plea to the Government not to be tempted down the road of ad hoc tax changes outside the proper structures, as they have done in the face of political pressure and under the weight of their own errors in the abolition of the 10p tax band this year. We on the Conservative Benches endorse that call by the Chairman and, when Lord Howe's report is published tomorrow, he will go further in setting out his views on how to improve the presentation, scrutiny and delivery of our tax law.
	We also need clarity of future intentions. Business decisions are made not so much on current tax rates, but on the basis of known future tax rates. Investment returns depend on the tax regime that an investment will face at the point when it matures and begins to produce profits. Clear signalling can be a positive support for investment and a major influence on behaviour, not only removing the negative of uncertainty, but introducing an advance awareness of intended business-favourable changes, thus stimulating the very supply-side response that such changes are almost always designed to achieve.
	The third aspect is scrutiny. Nobody who has ever sat on a Finance Bill Committee, or wandered inadvertently into a Finance Bill Report stage debate, will doubt that the mechanism we have for detailed scrutiny of what is often highly complex and technical legislation is inadequate. To be blunt—and I hope that the Financial Secretary will not mind if I say this—Ministers, who are not tax experts or even accountants, stand in front of a Committee and read out a brief whose technical implications they may not fully understand. Members of the Committee ask questions —often fed in by experts—of which, to be honest, they may have only a limited understanding.

Philip Hammond: The hon. Gentleman is right. I am sure that we could find hundreds, if not thousands, more examples in the Bill.
	I do not intend to criticise anyone, and I should place on record that the Treasury Ministers who took part in Committee did an excellent job. They were well-briefed and they answered questions as helpfully as they were able. I am sure, in the spirit of candour, that they would equally want to acknowledge that, in Committee, if I pulled from my pocket a question from a senior tax partner in a large firm of accountants, it occasionally caught them on the hop. I ask myself whether that is the most constructive way in which to scrutinise tax legislation.
	We are not experts in this place—we cannot be. People out there spend their entire lives dealing with tax, and not only that—they may spend their entire lives dealing with one tax, such as capital gains tax or the taxation of overseas domiciled residents. Sometimes, they deal with just a subsection of that subject. If we are to maximise the advantage that we can get from their embedded knowledge, we must, of course, try to involve them in the scrutiny process.
	At the moment, the scrutiny of tax legislation operates in a bit of a fantasy world. The debate is conducted in Committee between politicians who are essentially lay people, in tax terms, as a proxy for a real but unseen debate between the experts at HMRC and the tax professionals. To some extent, that is a pragmatic arrangement. While the Bill was in Committee, HMRC held an away-day for tax experts. A number of questions were posed and some answers were given. The questions and the answers then found their way to members of the Committee. It is a kind of shadow process.
	We ought to ask ourselves whether being a little more candid about our limitations would lead us to consider different scrutiny arrangements that could bring out of the shadows some of those people who contribute so much to the process but are unable to play a full part in it, whether they are independent experts or expert officials in HMRC. The Treasury Committee, of course, does an excellent job through its ability to call witnesses but there needs to be a legislative scrutiny arrangement as well as the oversight role that that Select Committee performs. I do not think that Parliament should be at all ashamed of the difficulty that even highly intelligent and very diligent lay people might have in dealing with some complex technical legislative changes. Instead of trying to conceal the scrutiny deficit, we should acknowledge it and try to put in place the mechanisms to deal with it.
	My noble Friend Lord Howe will tomorrow set out his ideas for addressing those concerns. I invite anyone who doubts the need to address them to look at the subject matter of the next group of amendments and to spend a little time reading schedule 3. I recommend inserted sections 169K and 169P as a starter—they are just a taster of the almost absurdly complex nature of tax legislation.
	We need to create the necessary arrangements to institutionalise the drive towards the simplification of our tax system. As a first step, new clause 18 would require the Treasury each year to publish specific proposals for the simplification of the UK tax code. It would not require a mere rewriting to tidy up the language and the cross-referencing, but a substantive simplification of the system. New clause 18 would also provide for Standing Orders to make arrangements for the effective scrutiny of proposals brought forward by the Treasury in the report that is called for.
	If we do not do that, our tax code will continue to grow exponentially, notwithstanding that it is already the longest in the world. It is now reaching the point where it is becoming self-defeating and self-perpetuating. Each new complex raft of legislation creates so many potential loopholes, avoidance mechanisms and technical difficulties that its intention is regularly undermined and often requires further rafts of legislation to plug the gaps, further lengthening and adding to the complexity of the tax code.
	My noble Friend's report will set out his proposals for institutionalising the drive for simplification of our tax system, not as a one-off exercise, but as a continuing embedded process. I am delighted to have had the opportunity to notify Parliament first of my noble Friend's initiative, which he will announce tomorrow, and I hope that the Government might take note of that and follow its precedent in giving Parliament a bit of warning of some of the announcements that are coming up.
	Finally, in order to deliver certainty to the system, we also need to address the growing discretion that is being given to HMRC officials in the interpretation of the law—that feature was particularly evident in the Bill. We need to create mechanisms that will allow taxpayers to obtain certainty about their tax position. Many other jurisdictions allow less discretion for officials but provide a clearer and more accessible pre-clearance regime that allows taxpayers to ascertain their tax position precisely. I am afraid that we are going in the wrong direction, with a limited pre-clearance regime and the exercise of an increasing amount of official discretion.
	Right now, Britain faces an economic downturn and considerable uncertainty about our economic future. However, alongside a response to the short-term challenge—we need such a response from the Government—we need to think about the long-term competitiveness of the UK as a place to do business. As we come out of this economic slow-down and investment starts to multiply again in the global economy, investors who are casting their eye around the world to decide where to make their marginal investment should see the UK as an attractive, stable predictable environment in which to deliver that investment. There is scope for a significant improvement to the UK tax environment without any tax cost to the Exchequer.
	Clear and open processes, with proper engagement and consultation at every stage; a grown-up approach to tax law, including the abandonment of the fascination for rabbits being pulled out of hats in the penultimate paragraphs of Budget speeches; politicians recognising the limits of their technical capabilities and restructuring the scrutiny process accordingly; a serious institutionalised drive towards simplification of the system; and clear rules, with limited official discretion to give taxpayers certainty of their position—those are the key issues that we need to address if we are to maintain Britain's competitive place in the global trading world.
	In the short term, the scope for reductions in the overall burden of business taxation is likely to be limited due to the state of the public finances, so, when the economic recovery begins, we must seek other routes to improve Britain's competitiveness and attractiveness as an investment and business expansion location. The agenda will send a signal to business that UK plc wants to begin the long process of rebuilding its reputation as a mature, stable and attractive location for business—a reputation that, I am afraid, the Government rather casually placed in jeopardy in their darkest hour last November— [ Interruption. ] The hon. Member for Taunton thinks that that was not their darkest hour; perhaps the darkest hour is yet to come.
	The message must be that our tax system is too important for the stability and prosperity of our country to be used as a platform for political posturing. There must be no more short-term stunts to wrong-foot political opponents and no more un-signalled changes. Stable—I might dare to say boring—is good when it comes to business taxation. We are clear where we stand on the issue. We have a long-term commitment to transparency, scrutiny, simplification and certainty in our tax system.
	New clauses 17 and 18 will make a start. Tomorrow, my noble Friend Lord Howe will offer detailed suggestions of his own as to how we might achieve some of the other objectives that I have mentioned. We will scrutinise his report carefully, and although it is a report to the Conservative party, we will be publishing it, so I invite the Government to scrutinise it as well. My noble Friend is an extremely experienced politician who has huge experience of simplifying and rationalising the UK tax system from when he inherited a top marginal tax rate of 98 per cent. from the Labour Government in 1979.
	I hope that the Government will take note of our initiative. They must surely have understood by now the risks of playing games with the tax system and the damage, including self-inflicted damage, that it can do. If they do not take up our agenda, the country, and especially the business community, will know that the next Conservative Government will do so. A reputation for fiscal stability and business-friendliness is hard-won over a long period, as I think even the Prime Minister will remember, but it can be blown away in the space of a few months, as we have seen since the pre-Budget report.
	Britain faces the challenges of a global economic slow-down, and in the longer term, perhaps even more challengingly, a shift in the balance of economic power from the established industrial nations to the emerging economies of the world. That shift is already under way, and I suggest that it is irreversible. We in Britain can ill afford such profligacy with our pro-business credentials if we wish to preserve the prosperity of our citizens and protect our tax base so that we can continue to enjoy high-quality public services.
	The process of rebuilding confidence in the UK's fiscal process will be slow and painful. It had better start now. I commend new clauses 17 and 18 to the House.

Jeremy Browne: I take the hon. Gentleman's point, and I was not preoccupied with VAT in 1979, mercifully. Oddly, here we are 29 years later and I am still paying the VAT that the Conservatives introduced every time I buy something that is not exempt from it. To be fair, the hon. Gentleman might have been talking to one of his hon. Friends when I said that Lord Lamont used an increase in VAT to fund a reduction in council tax. It is fair to say, and everyone will acknowledge, that he was trying to reduce an unpopular tax by increasing one that was less visible to the public. I am not making a particularly major point, just saying in passing that the desire to tax people in the way that they are least likely to notice is not unique to Labour Governments. It has been a feature of Governments of all parties.
	The hon. Gentleman made some interesting comments about the process of scrutiny of Finance Bills. It is certainly true—any Member who does not acknowledge this is either a tax expert or not being entirely frank—that some of the deliberations that we are asked to undertake would more appropriately be resolved by people with expertise in the matter. A greater role can definitely be played by people beyond this Chamber who can add their expertise. My only cautionary note, as I said in an intervention on him, is that I am always guarded about people thinking that all tax matters can be resolved by "experts". I know that he acknowledged that point. One tends to find that experts come up with all kinds of solutions, but often their cumulative solutions do not add up to an overall solution that the public find as agreeable as they would expect if they asked the experts to usurp the role of the politicians, about whom they are less confident but who can weigh up the solutions.
	Anyone who has led a council will know that some officials are adept at proposing strings of savings and economies to keep down council tax, but that a politician's eye is needed to spot which recommendations are likely to be popular and which will cause a party to lose control of the authority. The same is true of national Government: there will always be a political aspect to the process, regardless of how many experts are deployed.
	Given the length of the speech made by the hon. Member for Runnymede and Weybridge, it was unlikely that he would not touch on my final point, but it has become especially topical in the past day—or even year—or two. The Treasury Select Committee has said that the current Prime Minister liked to pull rabbits out of the hat when he was Chancellor. No one is going to accuse the present Chancellor of displaying similar showman-like qualities, but his predecessor was keen to do so in his Budgets.
	When the PBR was introduced as part of the annual set of major Government announcements in this House, we assumed that its purpose was to inform the main Budget. Instead, it has become a sort of secondary, lower-status Budget in its own right. It can be used to introduce tax changes, but the element of consultation is far less of a feature than many wanted it to be.
	Ironically, the consequences have been bad for the Government. The current Prime Minister introduced the PBR, but he has been the one most damaged by his tactics in the House. The abolition of the 10p tax rate is one example, but others include the inheritance tax scheme—and there are not many hon. Members who do not think that was rushed through for party-political reasons, with inadequate deliberation—and the proposals for non-doms and capital gains tax. Later this afternoon, we will talk about the retrospective element of vehicle excise duty, which is yet another policy of whose dangers the Government and Labour Back Benchers seem to have become aware only after it was announced. It would have been in their interests to consider all those matters in greater detail beforehand.
	For all those reasons, new clauses 17 and 18 have merit. This discussion has been interesting and wide ranging, and we look forward to hearing the Minister's response.

Kitty Ussher: This has been a wide-ranging and useful debate. I congratulate the hon. Member for Runnymede and Weybridge (Mr. Hammond) on speaking for exactly an hour, although my experience in the Finance Bill Committee tells me that he has managed the feat before. My congratulations also go to the hon. Member for Taunton (Mr. Browne), for not matching that record.
	In the interests of making progress, I shall not touch on all the topics that have been raised, my excuse being that some will be discussed in connection with later groups of amendments. New clauses 17 and 18 propose that the Treasury publish each year, not later than the PBR, a report containing information about the technical content of any tax changes, aside from rate changes, that it proposes to include in the following year's Finance Bill, as well as its proposals for the simplification of the UK's tax code.
	The Government use the PBR and the Budget to set out decisions on the tax system. We are committed to a fair and efficient tax system that supports business, individuals and sound public finances. We are also clear about the process: in the Finance Act 1998, we set it out in the code for fiscal stability that the PBR should be consultative in nature and include, so far as reasonably practicable, proposals for any significant changes in fiscal policy under consideration for introduction in the Budget.
	We made it clear that the PBR was not to be taken as an indication of all tax policy areas in which the Government might choose to act. The policy has been supported by the conclusions of a recent investigation by the Treasury Committee, and it was not opposed by Opposition parties when voted on during deliberations on the 1998 Act.

Philip Hammond: This is a technical but important group of amendments relating to the detail of entrepreneurs' relief. The abolition of taper relief in the capital gains tax changes that were announced in the pre-Budget report sent a very negative signal to business and, as I said in the previous debate, provoked a ferocious response from business organisations. Indeed, it created what I think is a unique coalition of all the business organisations: the CBI, the EEF, the British Chambers of Commerce and the Federation of Small Businesses. I apologise to any others that I have missed, but they all coalesced in an unusual way—perhaps not surprisingly, given that they represent disparate types of business. Faced with that wall of opposition, the Government's tactics were, to put it bluntly, opportunistic. They decided to try to buy off the most numerous but least expensive group of opponents. I am thinking of very small businesses, which are largely represented by the Federation of Small Businesses.
	Let me be unambiguous: small businesses play a crucial role in our economy. Businesses that employ no one other than the principals or one or two people deliver a major part of the economic activity in our economy. Beyond that, small businesses play a crucial part in the social fabric of our society, and we support them entirely. However, the great majority of them are not going to—indeed, have no aspiration to—grow into large businesses. Many people establish small businesses as an alternative to other employment; running a small business gives them a different lifestyle and working style and the opportunity to succeed in a way that suits them.
	Some people, of course, want their businesses to become the next Microsoft, but many do not want that. For the economic future of the country, we do not need only small businesses, which provide the bedrock of our economy; we also need to foster small but scaleable businesses—those that have aspirations to grow, create substantial employment and raise ever larger amounts of capital. We need to be concerned about those businesses because of their importance in creating jobs and prosperity and because the entrepreneurs who establish them—such businesses are often in high-tech industries—tend to be more mobile, so the option of relocating overseas tends to be more realistic for them.
	When this debate first broke, I met a group of serial entrepreneurs. They had established successive businesses, built them up, sold them on and then started again. Some of them were quite young—in their 30s or early 40s—but already had a chain of business successes behind them. We have to encourage such people if we are to have a future in the globalising economy.
	I cannot remember the precise statistic, but a staggering proportion of our largest companies—40 per cent. of the top 100, I think, although one of my hon. Friends may correct me—were not among the top 100 companies 30-odd years ago. There is a high degree of churn and innovation in the economy and we need those new businesses, which aim to grow and are constantly nurtured, to come through.
	The entrepreneurs' relief—the Government's solution for buying off the protests of small businesses, the most numerous group—will offer nothing of any significance to the entrepreneurs whom I have mentioned. Clearly, a serial entrepreneur who founds and sells business after business will not find the opportunity of a tax refund on the first £1 million of gain to be a significant incentive. The relief will, however, provide a break for those selling small businesses worth up to £1 million, and that is a welcome concession and U-turn by the Government.
	I shall not focus any more on the loss of taper relief, although we could debate the implications of that. I shall restrict myself instead to the restrictions that the Government have imposed on the entrepreneurs' relief that they offered in order to buy off opposition among small businesses to the abolition of taper relief. In Committee, concern was expressed by professional bodies and by people who run small businesses and who are likely to be affected. They said that, under the restrictions as they were drafted, some people, who on any equitable analysis looked as if they should get the relief, would be denied it. We had visions of all sorts of apparently perverse outcomes that would bring the measure into disrepute and create significant confusion.
	I therefore welcome Government amendment No. 29. I am sorry that the Financial Secretary is not here, but I offer my compliments to the Economic Secretary, who is here in her stead. In Committee, the Financial Secretary pledged to look again at the restriction that would have meant that if rent had been received at any time in respect of any asset that was the subject of an associated disposal, that asset would be ineligible for entrepreneurs' relief. An associated disposal is the disposal of an asset that is used in conjunction with a business, but is not owned by the business. To take a common model as an example, if a business owner who personally owns the factory building from which his business operates had at any time received rent from his own business for the occupation of that factory, it would not have been eligible for entrepreneurs' relief when an associated disposal took place alongside the disposal of the underlying business.
	In the case of many small businesses, the majority of the value of the global activity may well be in the associated asset, rather than in the business itself. That can be for all sorts of reasons—from security to the need to use mechanisms to raise finance. It is quite common for an asset, particularly a building, to be held in separate ownership. The measure would have been especially harsh for old, established businesses, for which any period of rent payment for such an asset at any time in the past would have led to disqualification of the asset. The measure was likely to have been particularly unfair to businesses such as farming, in which a separation structure is widely used; the people who own the land are often different from those engaged in the business of farming it.
	I am glad to say that the Government have taken our suggestion on board and disregarded all periods of ownership before April 2008 during which rent was received. They have therefore removed a potential anomaly that would have given rise to considerable unfairness. I am grateful to the Financial Secretary and the Economic Secretary for listening to the arguments and reconsidering on this occasion.
	However, we now have to address other issues. I hope that the Ministers have considered the arguments on those as well; they have not responded in the same way. The Opposition amendments in this group are aimed specifically at achieving clarification from Ministers on these issues, and we hope that we will hear a concise argument on why they are not prepared to accept the amendments. There are no politics in this. It is fair to say that, by and large, this schedule is as dull as ditchwater, but technical clarification is essential. Amendments Nos. 89 to 91 involve a housekeeping exercise that is of wider importance and touches on the debate that we have just had about how we make our tax law. I shall go into more detail on that in a few moments.
	The exception to the "dull as ditchwater" label is amendment No. 88, which deals with the treatment of share options under the enterprise management initiative. That initiative was set up by the Government to encourage people working in a business to own shares in it. It was aimed at helping high-tech start-up businesses—as I say, that is exactly the kind of business that we need to foster—in order to attract the kind of people that they need if they are to grow. Those people might come from the academic sector or another business, but typically they could command high salaries and comfortable packages working in other sectors. The scheme was seen as a way of offering them a real financial incentive to take the risk of working in a far less certain and predictable environment.
	Under the taper relief regime, which has now been abolished, gains on disposal of enterprise management initiative shares were treated as if the acquisition of the shares had occurred on the date of grant of the underlying options. That favourable treatment was unique to EMI shares. It was designed to promote the EMI, because the Government had identified it as a beneficial measure to promote the growth of high-tech start-up businesses.
	Under the entrepreneurs' relief scheme, favourable treatment is no longer available, so a key benefit of the EMI scheme is removed. There is real concern that that treatment represents an abandonment of the Government's commitment to the EMI and, even worse, of their commitment to employee share ownership. The Economic Secretary will have the opportunity, when she stands at the Dispatch Box to reply, to be clear and unambiguous about the Government's commitment to the EMI and to employee share ownership more generally. If she asserts that the commitment will continue, she might explain why she has removed the key advantageous tax treatment that the taper relief delivered, and say why she thinks that potential employees would be tempted by EMI share options, given the lack of any favourable tax treatment.
	Amendment No. 88 was tabled more in hope than expectation. It would make EMI shares subject to the same treatment as pertained under taper relief. Its fiscal impact is likely to be very limited, because one of the criteria for receiving the entrepreneurs' relief is that a person must own 5 per cent. of the business in question. It would be very unusual for an individual to own 5 per cent. of the shares in an EMI company. It can and does happen, but we are by no means talking about hundreds of thousands of people. The Economic Secretary has the opportunity to send a strong signal about the value that the Government place on high-tech start-up businesses, and about the Government's commitment to the EMI scheme and employee share ownership in general. Concerns about that commitment are more salient than the concern about the treatment of EMI shares under the entrepreneurs' relief.
	Amendments Nos. 89 to 91 deal with associated disposals, as does Government amendment No. 29. The issue relates to the conditions that must be met if a disposal is to qualify as
	"a disposal associated with a relevant material disposal".
	As I said, the stuff that we are dealing with is complicated. A relevant material disposal is a disposal of an interest in a business. A disposal associated with a relevant material disposal is the disposal of an asset that is used in conjunction with the business, but is not owned by the business. Before the disposal of that asset can be treated as a disposal associated with a relevant material disposal, three conditions have to be satisfied. They are set out in proposed new section 169K of the Taxation of Chargeable Gains Act 1992, which is inserted by schedule 3 to the Bill.
	To paraphrase, condition A is that there is a material disposal. Condition B is that the disposal is made as part of the
	"withdrawal of the individual from participation in the business".
	Condition C is that the associated asset has been in use for the purposes of the business. There is no problem with conditions A or C; they are fine. The amendments would delete reference to condition B, so that any disposal of an asset—typically a building or land, but possibly also intellectual property—owned separately by an individual but used in connection with the business would be an associated disposal.
	The definition of
	"withdrawal...from participation in the business"
	gave us cause for concern in Committee. It is a bit of a woolly concept, and we foresaw that the provision would give rise to uncertainty, and ongoing problems as taxpayers struggled to understand whether they would be entitled to relief. However, the situation changed somewhat when draft guidance was published, and I am grateful to the Financial Secretary for circulating it. It helpfully defines what
	"withdrawal...from participation in the business"
	means. It says:
	"A withdrawal from participation in the business concerned relates to the 'material disposal of business assets' which qualifies for Entrepreneurs' Relief...That is, it takes place when the individual reduces his or her interest in the assets of the partnership, or their holding in the company, as the case may be. It is not necessary for the individual to actually reduce the amount of work which they may do for the business."
	It goes on to give examples, which I will not read out. Withdrawal from the business is defined as occurring when an individual reduces his interest in the assets of a partnership, or his holding of shares in a trading company. In other words, if condition A is met—if there is a material disposal of business assets—condition B, which is that the individual makes such a disposal as part of a withdrawal from the business, will always be met. Condition B becomes tautologous as a result of the definition of the term
	"withdrawal...from participation in the business"
	in the guidance notes.
	Before we had the benefit of the guidance, we thought that condition B was offensive, but we now see that it is merely otiose. It adds nothing to the provisions of proposed new section 169K. We arrive at that understanding not through the mechanism of amending primary legislation, which is what the group of amendments would do, but by relying on non-statutory guidance. I suggest to the Economic Secretary and the House that that is not a satisfactory way to proceed. I offer her the opportunity to tidy up by using amendments Nos. 89 to 91 to put in the Bill what she is saying through guidance. If she is good enough to confirm that my interpretation, and the interpretation of others who have looked at the guidance, is correct, and that condition B will always be satisfied when condition A is satisfied, she must come to the conclusion that condition B is redundant and completely unnecessary. I suggest to her that the position should be made clear not through a non-statutory definition of
	"withdrawal...from participation in the business",
	but by deleting condition B. The Government addressed the substantive concern about condition B, but they did so in the wrong way. Making a condition self-fulfilling is not a satisfactory way to legislate. I am keen to hear the Economic Secretary's response on that point.
	Amendments Nos. 92 and 93 relate to restrictions on relief for associated disposals. The Government have dealt with the restriction where rent is payable in Government amendment No. 29. Other restrictions arise where the asset is in use for business for only part of the period of ownership, where only part of an asset is so used, or where the individual has owned the asset for only part of the period of business use. Again, guidance has been issued—CG64145—and that clarifies the point. It indicates that HMRC officials will be encouraged to take a common-sense approach to the application of those restrictions and that in terms of interpreting what is a just and reasonable apportionment—the test in the Bill—they are being encouraged to make the apportionment on the basis that any reasonable person would think appropriate.
	My remarks on amendments Nos. 89 to 91 apply to some extent to this group of amendments as well. It is better that we have clarification in the guidance than not at all, but it would have been better still if it were in the Bill. However, in this case, the guidance does not render what is in the Bill meaningless or unnecessary, so the Minister can make her case for doing it in guidance if that is what she prefers.
	Amendments Nos. 92 and 93 have been largely answered by the delivery of the draft guidance note. I wait to hear what the Minister has to say about amendments Nos. 89 to 91 and also wait for reassurances in respect of amendment No. 88 and the Government's commitment to EMI schemes.

John Redwood: I remind the House that I have included in the Register of Members' Interests the fact that I am a director and a shareholder in a small company, but I do not wish to draw on that experience for the purpose of these remarks.
	I support what my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) said about the need for the Government to listen carefully to those who say that the new capital gains tax regime is not as supportive of employee shareholding as it could be. I fully accept that the Government were well intentioned in wishing to get the main headline rate of capital gains tax down. I think that everyone in the House, with perhaps a few exceptions, is in agreement that that was a good thing to do. We were becoming very uncompetitive with the headline rate that we had, and it is good that the general rate is being reduced.
	However, it is most unfortunate, rather like the unfortunate idea of abolishing the 10p tax band to pay for the welcome lower rate of standard income tax, that in tidying up to try to pay for this measure, some of the rather good reliefs and opportunities that had been offered to entrepreneurs and to employee shareholders by the Government in previous Budgets were swept away, making the regime far less attractive.
	If I may draw on a personal experience from my past, I was involved in chairing a company that was financed by private equity where the incentive packages to individuals in the company were most important in driving recovery, profit and success for that investment. My experiences of that model and of talking to others who had been involved in private equity, including constituents of mine, persuaded me that there is a definite correlation between the success of British enterprise and the ability to reward and encourage people at all levels of an organisation with employee shareholdings so that they can participate in that success.
	I am therefore pleased that my hon. Friend tabled amendment No. 88, which would adapt schedule 7D so that some of the less generous terms that appear to be reflected in the reform of capital gains tax could be removed. Like him, I think that EMI is a good scheme, and I look forward to hearing the Minister explain how it might rest if his amendment, or something like it, were not introduced during the remaining proceedings on the Bill.
	Hon. Members on both sides of the House have come to understand how important small businesses, and smaller business led by people who wish them to grow rapidly, are to a successful enterprise economy. The Government's introduction of the taper relief and the 10 per cent. rate for enterprise undoubtedly gave a considerable fillip to enterprise and meant a bigger population of smaller companies were able to grow more rapidly with people getting that direct incentive, which was then not going to be taxed at nearly such a penal rate as if the capital gains tax regime had remained unamended.
	I hope that the Minister will take some pride in what the previous Chancellor did for enterprise and venturing in that earlier regime, which was one of the best things that he ever did. I hope that she will accept my compliments in the spirit in which they are intended. It would be a tragedy if a subsequent Budget started to demolish some of that good work, perhaps inadvertently or because of cheese-paring. I will be interested to hear what the Treasury arithmetic is on all this. The first-round consequence of reducing a rate of tax may well be to reduce the amount of tax collected, but the second or third-round consequence of a more favourable capital gains tax regime may well be to generate more revenue. That would have been my conclusion had the then Chancellor reduced the overall rate, leaving in place the more favourable rates for enterprise. However, there is a danger that the disincentive effect of the cheese-paring with the smaller enterprise rates will offset the possible good effects of the lower overall rate, so that the estimates that we might otherwise have had of rising revenue from greater success will be nipped in the bud or we will find ourselves short-changed.
	I hope that in responding the Minister will understand that we are, as the Government were prior to this reform, very keen on these promotional measures, particularly for employee shares, which can be extremely important. I would like her to share some of the thinking about the arithmetic behind these measures. There is always the danger that a crude concentration on first-round effects to try to offset revenue loss will do much more damage in the medium to long term because it will limit growth in the British economy and limit the growth of any smaller companies, and we will end up with less revenue.

Jeremy Browne: I am grateful for that intervention. I should declare an interest, in that my car has a diesel engine. Until about a year ago, I paid about 1p or 2p more per litre but—and this follows on from a point made in the previous speech—the greater fuel efficiency of diesel meant that the mileage was greater and that the cost differential was almost zero. The cost of diesel is quite a lot greater now, as a result of higher demand and restricted refining capacity. However, that prompts questions about whether the Government should introduce additional incentives for people to switch to diesel-fuelled cars, and that is territory that I do not intend to venture into in this speech

Jeremy Browne: I thank the hon. Gentleman for that question, but I do not want to be distracted, as I do not believe that the question is about the fairness or unfairness of trading; rather, it is about demand and oil producers' capacity to refine the product in the way that they need to if they are to bring it to market.
	The rise in the oil price is the first reason why the cost of motoring is a high-profile issue in the country at large at the moment. The second is environmental taxation, and I shall say more about that as it forms the basis of most of the new clauses and amendments under consideration. The third reason is the squeeze on household incomes. That is worth mentioning, as the sizeable rises in fuel costs in the UK and other EU countries that I have just set out have been accompanied by increases in food, utility bills and council tax. All those rises are happening at a time when the income of most households is being held down; in many cases, it is even not rising as fast as the official inflation rate, which itself is not in line with most people's experience. We are dealing with a live and important issue that will not go away. Unless the Government confront aspects of it today, I fear that they will find that their woes only accumulate.
	However, the Conservative record is also less than glorious. The hon. Member for Putney (Justine Greening) accused the Government of a "complete" lack of transparency when it came to environmental taxation. The Conservative party likes to give the impression that it is environmentally friendly. To Friends of the Earth, it emphasises its new found environmental credentials, but its speeches to road hauliers are rather different.
	The leader of the Conservative party has put a windmill on his house, changed his party's logo to an image of a tree and bought some extremely expensive recycled trainers that used to be old tyres. That is the entirety of Conservative policy on environmentalism. If he thinks that that will cut the mustard, he needs to have a higher regard for the intelligence of people in this country.
	The speech by the Conservative spokesman, the hon. Member for Putney, contained a straightforward contradiction, and she may wish to intervene on me to clarify the point. She said that the Government were increasing the total VED tax take from £1.9 billion to £4.4 billion—a sizeable increase—but she then said that the policy was not working, as it would lead to emissions savings by 2020 of only 0.16 million tonnes.
	The only logical inference from that observation is that the Government are not taxing fuel nearly aggressively enough. If the hon. Member for Putney believes that emissions are not being cut enough, and if she is in favour of environmental taxation, the presumption must be that she wants consumers to be even more incentivised to make greener choices.

Jeremy Browne: We are in danger of going into a cul-de-sac. Everyone says that they are in favour of differential VED—so we can agree on that—but the question is how big must those differentials be to achieve environmental benefits. My view and that of my party is that they need to be bigger than Government propose and that they should not be imposed retrospectively.

Jeremy Browne: That is not the position of the right hon. Gentleman's Front Bench, but he has a long record of having different positions from his Front Bench, even when he was sitting on it, so I will not criticise him on this occasion. The Conservatives' position, as I understand it—it is hard to understand—is that they would introduce additional environmental taxes over and above those being implemented by the Government, so the starting point is where the Government are. From that starting point, the Conservatives are seeking to put a £1 billion annual hole in their budget for families, so that is the initial deficit that they need to overcome.
	Finally—I have been speaking for longer than I wished to because I have been so generous in taking interventions—I want to discuss amendment No. 7 and new clauses 3 and 7, tabled by the Conservatives. My party takes climate change extremely seriously and always has, and we wish to achieve reductions in emissions from transport. Environmental taxation clearly has a vital role to play because transport contributes to a large degree to the total amount of CO2 emissions. Tax can make a contribution to changing behaviour. That is surely the Government's motivation, in addition to revenue-raising motives, in increasing tobacco taxation so that the taxation component is a high percentage of the overall price that the consumer pays when buying cigarettes and tobacco products. We support vehicle excise differentials and would support their being at a higher level so that consumers are even more incentivised to buy more fuel-efficient cars.
	I agree that environmental taxation has, to a sizeable degree, been discredited by the approach that the Government have taken. They have used public concern about the environment and climate change as a way of raising additional revenue. I do not doubt that they are concerned about climate change, as are politicians in all parties. However, people are understandably cynical when the Government see an opportunity to raise additional revenue based on those concerns without that money then being used to offset and reduce other areas of taxation so that the overall effect is neutral but the environmental taxes form a greater overall component of the total Government tax take. That would be a responsible way for the Government to progress, but I am afraid that it has not always been their approach.

Jeremy Browne: I am bringing my remarks to a close.
	We support amendment no. 7, which stands in my name. If new clause 3 is pushed to a vote, we would be willing to support it, although it is deficient, particularly in the introduction of the element of a statutory instrument mentioned by the hon. Member for Stoke-on-Trent, Central (Mark Fisher). Although it is badly drafted, it is better than the Government's current position.

Nigel Griffiths: I rise to oppose new clause 3. I am afraid to say that it is all too typical of the unprincipled politicking of the modern Conservative party, which has abandoned all its pretences at trying to claim the green agenda. Indeed, it repudiates the Conservative Chair of the Select Committee on Environmental Audit, under whose chairmanship it produced a report in February that begged the Treasury to increase taxes on motoring. It stated clearly:
	"Some motoring organisations have begun calling for the next planned increase in fuel duty to be scrapped"
	but said that the Treasury
	"must not defer its planned rises in fuel duty."
	The report gives the rationale behind its criticism of the Government and the Treasury. On page 11, it states:
	"By 2009—10, main fuel duty rates will...remain 11 per cent. lower in real terms than they were in 1999."
	Lower down that page, in paragraph 19, it warns that
	"road traffic emissions in England went up by 12 per cent. between 1997 and 2006",
	and it links those emissions to that previous statement. And, as the report makes very clear on page 12:
	"The forthcoming Budget is a test of the Treasury's environmental credibility: it must not defer its planned rises in fuel duty."
	It might have been a test of the Treasury's environmental credibility, and my colleagues passed with flying colours. As a test of the credibility of Conservative policies, it showed them to be woefully inadequate.
	In a previous report, the Committee stated:
	"The Government should increase the differentials within Vehicle Excise Duty between the most and least efficient cars".
	I think that that is what the hon. Member for Putney (Justine Greening) would call eco-stealth taxes. The Conservative MPs on the Committee, who are notable for their absence today, included the hon. Members for Ruislip-Northwood (Mr. Hurd), for The Wrekin (Mark Pritchard), for Beverley and Holderness (Mr. Stuart), for Wantage (Mr. Vaizey), for Bridgwater (Mr. Liddell-Grainger) and for Bexhill and Battle (Gregory Barker) and, of course, the Chair, the hon. Member for South Suffolk (Mr. Yeo). All those Conservative MPs signed up and, to embellish the green credentials of their party, ensured that that unanimous report argued strongly for higher fuel duties.
	The first report that I referred to made an interesting point that reflects on the debate when it asked the Treasury to consider ways to put the formulation of environmental issues outside the arena of electoral politics to some degree. Why, I wonder? Was it because the 2007 report of the quality of life policy group, co-chaired by Zac Goldsmith and the right hon. Member for Suffolk, Coastal (Mr. Gummer), stated their proposals on vehicle excise duty very clearly? Their report said that
	"we propose increasing the VED differential between the top and bottom bands of emissions performance"
	and that that change was
	"aimed primarily at influencing the used car market".
	The synthetic concern about backdating that we hear from Conservative Front Benchers is contradicted in the document that they paraded before Friends of the Earth and other green groups, which specifically said that the party had to aim primarily at the used car market. The document also proposed a new graded purchase tax, which would put 27.5 per cent. purchase tax and VAT on some larger cars, second hand or not.
	Things have not changed so much since the Committee's report, which was produced in February. It reflected a considerable increase in fuel prices, but since February those prices have gone up even further. Are the Conservatives rowing back to take account of those prices, as some are urging? Far from it. This morning, on the BBC, the Chair of the Select Committee, the hon. Member for South Suffolk, was asked a direct question by Mr. Naughtie, who said:
	"What about the back-dating which is very controversial"?
	The hon. Gentleman replied:
	"It is controversial; it is not of course back-dating in the traditional sense",
	but, he said,
	"3 times as many people buy a second hand car as buy a new car so if we are going to use bigger differentials in Vehicle Excise Duty to influence our purchasing decisions they have to apply to existing second hand cars as well as to new ones".
	That has been the consistent policy of the Conservative Members who have a track record of championing green issues, but there are very few of them. The challenge is this: I expect to see the seven Members of the Conservative party who pressed the Treasury not to back-pedal on vehicle excise duty or fuel duty in the Lobby with us, voting against the new clause. This evening, we will see whether even some Conservatives are willing to repudiate their Front-Bench team or whether, as the hon. Member for Putney suggested earlier, they will toe the party line and betray the environment.

Rob Marris: Given the time constraints, I shall confine my remarks to new clause 3 on vehicle excise duty.
	The Government propose to make changes to vehicle excise duty as from the Finance Act 2009, a year hence. It is right that they consult on that proposal, and that is happening. My views on the way forward are fairly well known. I think that the Government need to reconsider the VED proposals—I am fairly confident that they will—in the context of the overall tax system and the part that green taxes play in that matrix. That point was well made by my hon. Friend the Member for Birmingham, Northfield (Richard Burden).
	We need to consider what green taxes are. There has been a rather glib assumption that we are all talking about the same thing, and I am not sure that that is the case. Green taxes have a role to play in changing behaviour. The VED proposals that are on the table and out for consultation will have an effect on changing behaviour, but I am not sure that it is an effect that I would always wish to see. The proposals will, if implemented, lead to lower second-hand values for vehicles. That might mean, paradoxically, that an owner of such a vehicle, which might by next year be up to eight years old, may keep the vehicle instead of trading it in because they cannot afford to change it. The proposals might change behaviour as regards the earlier scrapping of vehicles that entered the fleet between March 2001 and the Finance Act changes in 2009. In the medium, term a car might be scrapped when it is, say, 12 years old, because the VED changes would make it less economical to run than if they had not been introduced.
	There may also be a change in behaviour that is exemplified by my mate, Steve Smith, who runs a 1990 Ford Granada. Some hon. Members will remember those—they are a right boat of a car. Steve is saying to me, "If these vehicle excise duty changes go through, because I have got a pre-2001 car I think I might just keep it a bit longer even though I know it's causing pollution." Another effect that the proposals would have in changing behaviour is that they would devalue the currency of and support for green taxes, which would be rather undesirable.
	An aspect of green taxes that has not been mentioned is the "polluter pays" principle, which we already have indirectly through the emissions trading scheme. If an industrial plant pollutes a lot, it has to pay more for its carbon dioxide allowances through the European emissions trading scheme, and those prices will be ratcheted up in the future. That is a green tax, made on the "polluter pays" principle. Those who have been driving vehicles that pollute more, such as private motor cars or company cars, have—sometimes in all innocence—polluted our atmosphere, contributed to climate change and contributed to greater Government expenditure on addressing the effects of climate change.
	For example, quite laudably, the Government have doubled spending on flood defences—both inland and coastal sea defences. One of the reasons that such increased expenditure is needed is that the climate has changed because it has been polluted, and it has, in part, been polluted by those who have, for the past seven years or more—and I suspect almost every Member is guilty in this regard—been driving polluting vehicles. The Government have to spend more money. We are going to have to spend more money on things such as reservoirs, and we have started to. The Government are spending more money on medical research because we are getting diseases such as malaria because of the changed climate. The Government are spending more money on biodiversity research, and on trying to prop it up—it is under considerable stress and pressure because of the pollution that has led to climate change.
	It is not only a question of changing future behaviour with green taxes—desirable though that is—but a question of the "polluter pays" principle and the price that we have to pay as a society, often refracted through the medium of taxation, for tackling the effects of climate change. Research on plant biology and the sort of crops that we grow in this country has to be carried out. We need research on the re-engineering of our railways and roads. That is already under way and it will become a lot more necessary as the climate continues to change. Climate change causes changes in temperature, which means that such re-engineering is necessary, and it is driven, in part, by the pollution caused by people driving around in these cars.
	I am not at all convinced by the Conservative position on new clause 3. There are problems with its technicalities—its need for a statutory instrument—to which my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher) so ably adverted. I do not like the technicalities. Moreover, the suggestion that the current proposals, which I hope the Government will reconsider, are in some way a stealth tax is one of the stupidest criticisms I have ever heard, given that vehicle excise duty is one of the few taxes where people get a bit of paper through their letterbox in advance, which says, "This is what the tax will be if you undertake this behaviour." It cannot be a stealth tax. I do not like the idea of stealth taxes anyway, but that really is a silly criticism of vehicle excise duty, of all things.
	Although I find the hand-wringing of the Conservatives and their new-found concern for the poor heartening on one level, I hope that the hon. Member for Putney (Justine Greening) will forgive me when I say that I am rather suspicious about it. It seems rather opportunistic in this context. An early-day motion was introduced by my hon. Friend the Member for Blyth Valley (Mr. Campbell). I understand—and I stand to be corrected on the figures—that there are 69 signatories, 12 of whom are Conservatives. That is an example of why I am somewhat suspicious of their new-found concern for the poor.

Adam Price: I am not familiar with the detail of the history of the French fuel regulator. Fuel regulators exist in various OECD countries—for example, Canada has regional fuel price regulators—but I will have to look into the issue. I understand that Sarkozy proposes looking into not only VAT, but a number of other mechanisms; indeed, the French have in the past supported harmonisation of EU diesel rates, which we might need to consider, given what is happening to our haulage sector. The principle of what President Sarkozy is suggesting is very much aligned with the principle behind new clause 8. We need a mechanism to smooth out the fluctuations, because they are having a devastating effect on our economy and the French economy.
	All Governments get a windfall gain as a result of fuel duties. This Government get a particularly large one, because of the high level of the duty and because we effectively have double taxation, as we levy VAT on the fuel duty element, too. The reason fuel taxes are historically popular with Governments is the inelasticity of demand, as the hon. Member for Dundee, East said. The estimated elasticity of demand is about 0.4 to 0.5, but is much lower in rural areas, at 0.2, for the reasons that we have heard. The result of the fact that elasticity is less than 1 is that fuel consumption falls in response to higher prices, but expenditure goes up. That is the key issue. There is a windfall gain.
	The loss of revenue argument does not hold, because people are transferring expenditure from other goods and services in the economy on to fuel. If we were able to cut fuel prices through a fuel regulator, consumption in other parts of the economy would go up and the Government would get the VAT in that way. I have not even referred to the issue raised by the hon. Member for Dundee, East about the offshore windfall.
	We have already heard about the problems of rural areas in relation to hard-pressed sectors and communities. The Government must acknowledge that it is particularly difficult for certain sectors of the economy to respond to rapid rises in fuel prices. Haulage companies, farmers and those in the fishing industry, for example, find it difficult to pass on increases in fuel costs to their customers, the end users, when oil prices are rising rapidly. That is because contracts generally last for an extended period, and there is no provision for additional fuel costs to be passed on until the contracts are renegotiated. The fact that these sectors come under pressure leads many companies within them to cut margins even further, resulting in cut-throat competition within the sectors because the companies have to go after the same contracts. This leads to a vicious circle. We are seeing haulage companies going bust in Wales and in Scotland. A fuel regulator could provide a degree of control over this situation and prevent those sectors from being exposed in this way.
	Eventually, we shall have to make the transition to a post-oil economy, and the shift towards environmental taxation is an important part of that. However, if we lose public support for the notion underlying environmental taxation, it will be difficult for a Government of any party to make the necessary changes. I therefore urge the Government to listen carefully to those on their own Benches, and to support this very modest proposal from Plaid Cymru and the Scottish National party, which is backed by many of the sectors that have been affected, in order to bring about a degree of Government protection while we are going through this difficult time as a result of the massive price rises on the world oil markets.

Mark Hoban: We spent some time in the Public Bill Committee—virtually all of two sittings—discussing schedule 7, but interestingly, there is still enough material in it for a further debate on Report. A large number of amendments were tabled in Committee, and now on Report, because the schedule was very much a work in progress when the Bill was published. That was reflected by the fact that the order of consideration in Committee was varied so that schedule 7 and sections 22 and 23 were taken at the end of proceedings.
	I still do not think, despite the volume of amendments being tabled, that the schedule is perfect. More work will be needed to ensure that it delivers the Government's stated objectives, and one of the challenges for taxpayers is that they have to comply with the rules from 6 April this year, but legislation will only be finalised today. There is a great deal of other work to do, not just with the schedule itself, but to support implementation, and I want to come back to that theme when I address the amendments tabled by the Liberal Democrats.
	I would like to begin with amendments Nos. 13 and 14. We touched on this point in Committee, but when I revisited the record, it did not appear to be fully dealt with. My concern is that the way in which proposed new section 809C(4) is drafted suggests that the claim is invalidated if an individual nominates foreign income or gains that result in a relevant tax increase that exceeds £30,000. That is a genuine and serious concern to taxpayers, and we ask that the amendments are accepted by the Government to provide comfort. On the possible ramifications with respect to a claim for foreign tax credit, we feel that a taxpayer who makes a mistake and nominates an excessive amount of foreign income or gains, or whose return is adjusted so that too much foreign income or too many gains have been nominated, should be informed that they have over-nominated and should be entitled to adjust their nomination.
	Amendment No. 15 is a probing one, which seeks to examine the issue of mixed funds. We want to be sure that proposed new section 809Q is fit for purpose and proportional to any mischief at which it is aimed. We understand the principle that proposed new section 809R seeks to enact—namely, that where there is a transfer from an offshore account containing mixed funds to another offshore account, the funds transferred should be treated as containing the same proportion of the different categories of income and capital as the original account from which the funds were transferred. We believe that to be the case, but the drafting is complex and the legislation is not sufficiently clear.
	In that context, a far-reaching anti-avoidance rule, such as that set down in proposed new section 809Q, appears wholly inappropriate in the context of mixed-fund accounts. The provision appears to provide HMRC with excessive power to challenge transfers from mixed-fund accounts, such that taxpayers will not be confident of their ability to self-assess. As the Financial Secretary said on a number of occasions in Committee, this is a matter of self-assessment. We have expressed the concern throughout the debates on schedule 7 that, although well-advised taxpayers will understand how the rules operate, those who are not as well advised will find it difficult to understand how some of the issues can be dealt with.
	What I am looking for from the Government in respect of proposed new section 809Q is some sense that they believe that the anti-avoidance provision is necessary. It might be helpful if examples of the mischief that it is designed to counter were provided. Obviously, we do not want to encourage mischief, but we should try to strike a balance in our debate.
	It has been suggested that, if the Government are minded to retain proposed new section 809Q, thought should be given to copying the Inheritance Tax (Double Charges Relief) Regulations 1987. In that case, as well as other explanations on which the taxpayer could rely, secondary legislation was enacted, setting out examples so that primary provision could be understood. That gave taxpayers further guidance to help them comply with complex provisions. Although there was some discussion in a previous debate about whether secondary legislation was appropriate—the hon. Member for Stoke-on-Trent, Central (Mark Fisher) had some robust views—even I concede that there are times when it would be helpful. It would be preferable to relying on non-statutory guidance, which could be put in place without proper parliamentary scrutiny.
	I shall go through the amendments in the order in which they appear on the selection list, not necessarily in the order of their importance. In Committee, there was significant debate on a matter about which there remains uncertainty among tax advisers and a wider coalition of concern than was perhaps evident when we discussed it there. Amendments Nos. 20 and 21 would create the means for the Government to tackle the treatment of fees for professional services. "Professional services" covers not only accountants and lawyers—although the Financial Secretary will not be surprised to know that I have a problem with the position of accountants—but investment management services and others.
	The Government took on board the concerns that the British Bankers Association expressed that, before amendment in Committee, the Bill put at risk extensive wealth management services in the UK. That is why the Government tabled an amendment to introduce proposed new section 809W, which grants an exemption from the remittance rules for services provided by UK-based firms with regard to property that is based wholly or mainly outside the UK. The bit about the location of the property is important because the Government have tried to look through the offshore trusts that might exist to the underlying property.
	The provision about underlying property causes two concerns. First, it might discourage investment in UK equities. Secondly, it might have an impact on UK-based fund managers. A UK fund manager's fees for managing a portfolio of non-UK shares in an offshore trust would not be treated as a remittance. Indeed, fees charged by a non-UK manager managing a portfolio of UK shares in an offshore trust would not be treated as a remittance. However, a UK manager managing a portfolio of UK shares on behalf of an offshore trust would find his fees treated as a remittance. That puts us in a position whereby we either discourage investment in UK equities if the portfolio is managed by a UK manager or end up discouraging the use of UK fund managers. It is not in the interests of the country to permit that. We have a strong fund management sector in the UK, which provides services to a wide range of individuals. We appear to have created an artificial distinction in the sort of shares or property that they manage by providing relief for non-UK property. I believe that, having responded to the initial concern and met the BBA's approval, the Government need to think more carefully about how to deal with the current problem, which is partly due to the timing of the process.
	I want to consider fees for professional services other than investment management. The Financial Secretary was helpful in Committee when I raised the matter. She said:
	"The hon. Gentleman asked whether the fees exemption would apply to individuals who used a UK-based firm to advise on completing US returns and that could be within the terms of the exemption. However, it would depend on the details of each individual case." ——[Official Report, Finance Public Bill Committee, 19 June 2008; c. 846.]
	The explanatory notes state:
	"Accountancy fees for preparing non-UK tax returns would also be covered providing the majority of the accountancy service relates to non UK property."
	That is quite a clear statement, but would UK tax advice pertaining to a non-dom's UK tax exposure with respect to overseas property also be considered to fall within the exemption? This is a variation on a theme, but would a UK adviser advising on the UK tax implications of offshore property for a non-dom be covered within the exemption? That illustrates the complexity of the issue. I would ask the Financial Secretary to consider the position of all service providers in the UK and ensure that the exemption is worded in such a way that it enables UK-based accountants and investment managers to compete fairly with foreign providers. We would therefore need to consider how the exemption could be worded.
	As I acknowledged in Committee, the mischief that the Government seek to tackle is clear. They want to avoid a situation where people set up elaborate structures to pay domestic staff. I am fully on board with the Government's approach, but it is not easy to do that, as I found out when a number of people came forward with amendments and suggestions of how I might phrase the proposal. It was difficult to word the provisions in such a way that enabled us to support the UK financial and ancillary services sector, but at the same time did not allow people to pay their driver through an offshore company. That is difficult to do within the confines of the Bill. Furthermore, I do not have parliamentary draftsmen to help me. That is why I have gone down the route, which the hon. Member for Stoke-on-Trent, Central tried earlier to persuade us not to go down, of throwing myself at the mercy of the draftsmen, the Treasury and HMRC, by suggesting that fees should be dealt with through secondary legislation. That would give us the opportunity to consult with a wider range of affected businesses that provide services in the UK to non-doms, which would overcome the problem of the narrow consultation that took place during Committee.
	Our proposal would also enable a much fuller and, I hope, more watertight description, which would distinguish the mischief that we want to stop from the need to ensure a level playing field for banks, investment managers and so on. I hope that the Financial Secretary will look kindly on that, because it addresses one of the important issues that, because of its sensitivity, remains unresolved. The UK has a successful professional service sector that exports its services, but we are in danger of putting that sector at a disadvantage in relation to others.
	Let me deal with amendment No. 110, which is again about our competitiveness. The purpose of the amendment is to ensure that UK companies are not disadvantaged as compared with non-UK companies when operating employee share schemes for non-ordinarily residents and non-domiciled employees. Without amendment No. 110, UK companies will automatically have to operate pay-as-you-earn schemes and pay national insurance contributions where there are perhaps no underlying UK duties, which seems unfair if their non-UK counterparts do not have to do so. Amendment No. 110 keeps to the spirit of the changes, in that PAYE and NICs would apply only where there is a real remittance, but it does not assume that all payments in UK shares automatically constitute remittances.
	Since tabling amendment No. 110, I have received a number of representations from UK multinationals that compete in global labour markets. They believe that the Government's proposals represent a change in existing practice and a threat to their ability to recruit.
	Let me deal with the change in practice. Historically, shares were still deemed to be offshore, despite having been issued by a UK company, if they were held by an offshore trust—usually in Jersey—either in the form of certificates or in a CREST account in respect of an offshore trust. Whether they were held electronically, on a dematerialised basis, or in the form of certificates, they were deemed to be offshore. In consequence, they were treated as being remitted only when they were brought onshore, by being either physically or electronically delivered to someone working in the UK.
	The Bill as drafted will change that practice by looking at where the underlying securities were issued, rather than at where they were held. In a way, this harks back to our previous debate, in which we talked about looking through offshore trusts to see the underlying property. We have exactly the same situation here, in that the trust will be offshore but people will look through it to the underlying property. It is that ability to look through that is seen as the change of practice, and that is causing the problems.
	The consequence of that change is that it could lead to a tax charge on a non-domiciled UK resident employee, but that would not apply to UK-based employees of non-UK companies. Let me give the House an example using, for the sake of argument, Lloyd's. A non-dom employee with shares in Lloyd's that were held in an offshore trust would pay NICs and PAYE on those share options. If such a person worked for Deutsche Bank in the UK, however, they would not have to make those payments so long as their shares remained offshore.
	The Minister might tell me that there has been a misunderstanding and that both would be treated in the same way, but a number of people involved in this area are concerned that a distinction will arise between people working in the same categories but for UK and non-UK companies. Given that we are part of a global market for talent, and that many of the multinationals operate here and compete for the same people, there is a sense that UK-based companies might be at risk as a consequence of this provision.
	The easy answer might be to say that the additional PAYE and NIC costs would fall to the employee, but that would soon become a problem for the employer. Non-dom employees in that situation would pay an additional tax charge, but they might expect the employer to meet that charge. Alternatively, employers might find that people would prefer to work for Deutsche Bank instead of Lloyd's, for example. This is an important issue in regard to the competitiveness of the UK economy.
	Amendments Nos. 111 to 113 also relate to securities income. Their purpose is to ensure that the relevant income can be apportioned to UK and non-UK duties on the basis of days worked in the relevant period, and that the relevant period itself can be adjusted on a just and reasonable basis. The approach to the new legislation is to work out the relevant share scheme gain, then to apportion it between UK and non-UK duties. First, it will be necessary to identify the period to which the share scheme gain relates. This is the "relevant period" referred to in new section 41B, which sets down the relevant period for each of the share scheme changes on a prescriptive basis.
	Flexibility is required, however. I want to give the Minister three examples of where flexibility might be needed. First, let us assume that an employee is granted an option in company A, which is then taken over by company B at a time when he has not worked for company A long enough to exercise his option. The option is then substituted by an option in company B, which becomes exercisable in due course. At the moment, the legislation would look only to the time worked for company B—or company A; I am afraid that it is not clear to which it applies—when clearly the period to be taken into account should be capable of including the time worked for both A and B. That would clearly give a longer period of time over which to apportion the gains.
	In the second example, we might find that an employee had acquired a particular type of shares, known as forfeitable shares, and made an election to be taxed up front. As drafted, the legislation will take into account only duties undertaken on the day of acquisition itself, whereas the proper approach should surely be to apportion over the period in which the employee could lose the shares or the period in which they have been earned. There is a risk under this type of scheme that the proper apportionment is not open.
	Thirdly, there is the example of where an employee receives an option that he can exercise immediately. Under currently proposed legislation, the relevant period would again take into account only the day of the award of the option, whereas the proper approach would be to look at the facts and work out whether it was awarded for work done or work to be done. The amendments are designed to bring about greater flexibility in working out the time period over which the gain from the shares and thus the PAYE and NIC can be apportioned.
	The key point is that the flexibility is needed on the overall apportionment. The power to apportion once a relevant period is decided is already available, which goes some of the way towards addressing the problem, but there is currently no flexibility on calculating that relevant period. The provision will prevent the oddity I have set out from arising.
	It is also worth bearing in mind the position of those who are not ordinarily resident in the UK, but still work here. Their employment income is apportioned between the time they work in the UK and the time they spend abroad. The point has been made to me that their participation in share option schemes is not treated on the same basis. Firms are increasingly moving the variable performance element of their remuneration packages away from cash to share option schemes. Treating that element as a source of remuneration in a different way from their salary could create an issue in terms of the apportionment of the charge.
	On amendment No. 10, we understand that the Government feel it necessary to amend paragraph 86 of the transitional provisions to make it clear that the exemptions for property acquired by the relevant person before 12 March 2008 apply only to goods and not money. However, as a potential unintended consequence of the amending provisions, there is now concern that any money brought into the UK prior to 6 April 2008 that was not taxed when remitted could be deemed to be taxable in 2008-09. In view of the comments of the Government and, I understand, Treasury and HMRC officials, it is felt that this is not what the Government intended, but given the importance of the issue, we feel it is vital to amend the legislation to put that intention beyond any doubt.
	The procedures on exporting and re-importing money after 6 April 2008 should be clarified. The amendments proceed on the basis that the Government do not intend individuals who have imported funds from successful source-ceasing exercises prior to 6 April 2008 to be taxed, should the funds be exported and then re-imported. The legislation prior to that date allowed the source-ceasing technique so individuals would have no reason to keep records. Given how mixed the funds could have become during their various transfers in and out of the UK, we feel that to seek to impose a tax charge in such situations would be completely impractical. I suspect that the Minister's response will be that amendment No. 62 is designed to tackle the same issue. I welcome that and on that basis I shall not press amendment No. 10. We are on the same page in trying to tackle the same issue.
	Amendment No. 11 relates to the interaction between proposed sections 809N and 809L of the 2007 Act, which could unintentionally result in a tax liability arising when an individual has gifted foreign income on chargeable gains prior to 6 April 2008. The concern is that an individual can be a gift recipient prior to that date and that the use of the terms "used in" and "enjoyed by" in proposed section 809L(4)(a) is sufficient to apply to a situation where the gift occurred prior to 6 April 2008. For example, a gift of, say, employment income to a trust from which a settlor is excluded, which uses the funds to purchase a property for the wife before 6 April 2008 would be taxed as a remittance on the husband should he continue to use or enjoy the property by residing there with his wife after 5 April 2008. We believe that the intention is not to impose a tax charge with respect to gifts that occurred before 6 April 2008, even if the use or enjoyment occurred after 5 April 2008.
	That, then, is the basis of amendment No. 11. To be helpful to the Minister, I tabled an alternative, amendment No. 12, which would apply if the Government wished the exemption to apply only when the property was brought to the United Kingdom before 6 April 2008 and any use or enjoyment occurred after 5 April 2008. In a spirit of co-operation, I have tried to give the Minister a variety of options.
	I am pleased that the Government have chosen one of my amendments. It took me a while to work out that Government amendment No. 18 was my amendment, but I am grateful to the Chancellor for appropriating it. It is one of a long line of ideas that the Chancellor has appropriated from my party since the middle of last year—

Jeremy Browne: I had resolved not to take any interventions during my brief speech, but sadly all those hon. Members who intervened so many times in my previous speech have lost interest in the Bill and I am left to speak to a less populated Chamber. I shall not detain the House for long.
	In Committee, my hon. Friends and I raised several concerns and tabled an amendment specifically about foreign nationals in low-paid employment, small businesses employing foreign nationals, and higher education institutions. We had some useful discussion of those topics and an appropriate de minimis level for this area of the legislation. I shall not revisit that discussion today.
	The purpose of the amendments that I have tabled, as the hon. Member for Fareham (Mr. Hoban) suggested, is to allow a longer period of time for those seeking to comply and thus to make it easier for them to do so. The drafting of schedule 7 runs to 55 pages or, I am told, 22,989 words. I have not counted them myself, so I cannot vouch for that statistic. It was supplied to me by the Low Incomes Tax Reform Group. The explanatory notes alone are 160 pages long and, given how many amendments the Government have tabled to it, this area of the legislation is clearly a work in progress, even at this late stage.
	I have tabled eight amendments, but only two are substantial. Amendment No. 94 would prevent part 1 of schedule 7 having effect until Royal Assent. The Institute of Chartered Accountants argues that taxpayers cannot be given guidance until Royal Assent, but the provisions in this part will apply before that happens. Taxpayers may therefore have acted in a way that, at the time, did not constitute a remittance, but will do so once the legislation is in force. The institute states:
	"This uncertainty is likely to result in widespread confusion and non-compliance".
	That is likely to damage the UK's investment reputation.
	Amendment No. 95 would prevent changes in part 2 of schedule 7 having effect before 6 April next year. Again, the institute, to which I am indebted for its insights into this aspect of the legislation, states:
	"We are concerned that there is insufficient time to scrutinise legislation of this complexity and that, despite the best efforts of all involved, complex legislation passed with such haste could contain errors."
	That is a polite way of putting it. If I had written that, I would have put "will" instead of "could".
	Amendments Nos. 96 to 102 are consequential amendments that follow on from amendments Nos. 94 and 95.
	Let me conclude with a slightly broader point. A feature of this budgetary process and of the Finance Bill has been legislation undertaken in haste followed by long periods of revision in Committee and on the Floor of the House. I am thinking in particular about the 10p tax rate and the compensation mechanism, the changes to entrepreneurs relief in schedule 3 and the overhaul of HMRC powers. The best example of all is this schedule, which is still undergoing revisions and changes an hour after we were scheduled to have finished our debate on the legislation in totality. For that reason, amendments Nos. 94 and 95 seek to buy a bit more time and to give people who have an interest in such matters the opportunity to make the necessary adjustments.

Jane Kennedy: Since the pre-Budget report and throughout our proceedings on the Finance Bill, we have engaged actively with interested bodies. The amendments that we have tabled today—there are 48—reflect how we have listened and responded.
	I accept what the hon. Member for Fareham (Mr. Hoban) said—namely, that the schedule might not yet be perfect. I want to make it clear that we will continue to listen. Given the technical nature of the proposals, I have asked HMRC officials to establish a joint committee in the way proposed by the Institute of Chartered Accountants in England and Wales. I pay tribute not just to the ICAEW but to a number of the representative bodies that have made suggestions and enabled me to be reassured that the final shape of the Bill is close to, if not exactly, what we sought to achieve. The joint committee will be led by HMRC. It seemed a sensible suggestion and I will be kept up to date on its work. It will be established following Royal Assent and will review the operation of the legislation in practice to ensure that it is working as intended by Parliament.
	Amendments Nos. 40 to 45, 52 and 53, like many of the amendments that we are discussing today, clarify how the rules will work in practice. I shall try to answer as many of the points as possible—all of them, if I can—as I go through my speech, but not necessarily in the order in which they were made.
	Amendments Nos. 20 and 21 effectively ask the Government to draw up a list of services that will fall within the exemption and to formalise them by order and statutory instrument. I am resisting the urge to have some fun at the idea that the hon. Member for Fareham is suggesting such a route. I understand why he has suggested that change. I pay tribute to him for the thoroughness and attention to detail that he has applied to this complex area and I appreciate the way he has brought forward his arguments and pointed out the deficiencies where he has seen them. I have acknowledged some of them and, as he has recognised today, we have brought forward further amendments to respond to others.
	We cannot support amendments Nos. 20 and 21 because, with the best will in the world, we would be unable to arrive at a list of qualifying circumstances that would cover every service that we would want to include. The process would prolong any uncertainty. Our amendments Nos. 52 and 53 address the same issue from what we believe is a more pragmatic direction. They identify particular circumstances in which a remittance will always take place even if one or both of the conditions for the exemption would otherwise be met.
	The second set of Government amendments, which are amendments Nos. 46 to 49, deal with mixed funds and have also been introduced for the purpose of clarification. They provide for changes to the rules on the treatment of mixed funds to ensure that they are clear and comprehensive. We touched on that in Committee.
	Amendment No. 15 would remove the anti-avoidance provision in the way described by the hon. Member for Fareham. The provision, which we have introduced, is absolutely necessary to ensure that the rules are workable. The rules provide clarity and, crucially, they also protect the vast majority of taxpayers from those who might seek to abuse the provisions. He asked me whether I could give an example of a possible abuse without laying out suggestions as to how somebody might get around the provisions. I shall offer one.
	A non-domiciled individual could obtain a loan at the beginning of the tax year, put the loan capital into a mixed fund and then remit moneys up to the amount of the loan before repaying it. Under the ordering rules, the remittance would be capital for the year, and the anti-avoidance rule would prevent that manipulation of the mixed fund. I have no doubt that many other examples could be given, but that one might help to clarify the matter.
	I turn now to the amendments that concern the £30,000 remittance basis charge. Our amendments are minor and make a number of changes to the schedule. They make it clear that payments of the charge from overseas employment income is not a remittance. The hon. Gentleman will remember that in the Public Bill Committee I promised to return to this matter on Report to put it beyond doubt. His amendments Nos. 13 and 14 are important but, I believe, unnecessary. The self-assessment process will effectively add £30,000 to the tax bill of a remittance basis user, regardless of how much they nominate. HMRC will manually check nominated amounts, and if more has been nominated than is required, the taxpayer will be contacted and helped to correct their claim. Taxpayers will not be forced on to the arising basis.
	I was interested to hear what the hon. Gentleman said about amendment No. 110. The new rules have been broadly welcomed, because they provide a simpler and clearer basis for the taxation of employees. However, I noted the representations that he has received suggesting that they pose a risk to UK firms' ability to recruit international talent. The underlying principle that applies to individuals who have elected for the remittance basis is that income that is remitted should be taxed. Unfortunately, the amendment would undermine that principle.
	The hon. Gentleman gave an example of one employee working for Lloyds and another working for Deutsche Bank. He believes that the rules that we have established would work against the interests of Lloyds, and he gave the example of shares. It is a complicated matter, but shares are different assets. If the German bank's shares were listed on the German stock exchange, they would be German assets—stating the obvious, perhaps. A UK bank's shares listed on the UK stock exchange are UK assets, and there will be no change to how we treat such assets. The new rules reflect the fact that those are different assets, which has always been the case. If representations are being made to him that that will undermine the competitiveness of UK companies, I shall want to study them and follow up on them to ensure that that is not happening.
	May I take this opportunity to clarify something that I said about employment-related securities in the Public Bill Committee? The hon. Gentleman asked me whether the phraseology of Government amendment No. 323, which was tabled in Committee, included the exercise of an option. The wording of that amendment did not include the exercise of an option, but it worked in conjunction with amendment No. 322, which did cover that. I am sorry if the answer that I gave in Committee was unclear on that point, and I hope that I have clarified the position.
	Amendments Nos. 111 to 113 are intended to apply a "just and reasonable" test. I hope that the hon. Gentleman accepts that I realise that in some circumstances some discretion may be needed in calculating how much income is taxable, rather than rules being applied mechanistically. We listened to representations on the matter and introduced in Committee a new clause providing for a just and reasonable apportionment to be made when the strict rules do not give a reasonable result. That provision is capable of dealing with most situations in which the relevant period rules give rise to difficulty. Furthermore, the amendments would create uncertainty and introduce complexity, to the detriment of schedule 7 as a whole.
	I turn now to the transitional rules for funds brought to the UK before 6 April. All the relevant Government amendments have been tabled in response to consultations with representative bodies. They provide clarity for remittance basis users who brought ceased-source income to the UK before April 2008.
	Amendment Nos. 11 and 13 would alter the transitional arrangements for the alienation provisions, where the qualifying property of a gift recipient was either given or brought to the UK before 6 April 2008. The amendments are not necessary, as Government amendments Nos. 62 and 63 address any risk of unintended liability that may arise.
	Government amendments Nos. 65 to 71 deal with the grandfathering rules for offshore mortgages. They extend the original grandfathering provisions for offshore mortgages to cover cases where repayments of the offshore loan were guaranteed under the terms of a bank guarantee secured on the property. The various conditions for the reliefs that apply to conventional mortgages will also apply to these arrangements, subject to the necessary changes. Government amendments Nos. 65 and 66 provide that the arrangements must have been in place before 12 March this year. Government amendments Nos. 67 and 68 ensure that relief will cease if any term of the guarantee is varied or waived, or if payments under the guarantee cease to be secured on the interest in the property, or if the guarantee is extended to cover repayment of any other debt. I know that what I have said will be studied carefully.
	Amendment No. 17 would allow relief for offshore mortgages to continue even if a further debt were secured on the interest in the property. As I made clear in Committee, the Bill provides a generous relief and I am not persuaded that there is a case for further relaxation. Amendment No. 19 would allow grandfathering for remortgages to apply where a person uses the money to repay the original loan. Again, I consider the amendment unnecessary as, according to the natural meaning of the statute, it is clear that the person involved would have used the money for the proper purpose if he had instructed the lenders to make the appropriate arrangements.
	The hon. Member for Fareham asked about unrepresented taxpayers. An offshore mortgage is a complicated financial instrument. In HMRC's experience, unrepresented taxpayers tend not to have offshore mortgages. Extending the grandfathering to a wider range of mortgages would inevitably cost millions of pounds. In addition, payments out of gains and employment income have been treated previously as a remittance, so giving relief would be to untax things that are already taxed.
	Government amendments Nos. 72, 73 and 85 clarify various elements of the rules covering offshore income gains and the transfer of assets abroad. Government amendments Nos. 74, 78, 79, 81, 86 and 87 make minor and consequential changes and are necessary for the proper working of the legislation.
	Amendment No. 16 would provide for the rebasing rules for trusts to apply to shares acquired as a result of a share reorganisation, where the original shares were held at 6 April 2008. We believe that the amendment is unnecessary. Where section 127 of the Taxation of Chargeable Gains Act 1992 applies, new shares are eligible for any reliefs to which they would have been entitled had they been acquired when the old shares were acquired. It follows that, if the original holdings were acquired before 6 April 2008, the new holding will be treated as having been acquired at the same date, and rebasing will be available on disposal of the new holding. I hope that that is clear and that I have been able to reassure the hon. Member for Fareham on a number of his amendments.
	I have saved amendments Nos. 94 to 101 until last, although in no way do I imply that they are least. The hon. Member for Taunton (Mr. Browne) has tabled them in a bid to change the commencement provisions. Amendment No. 94 would delay the reform, and amendments Nos. 95 to 100 would apply a general commencement date of next year. Delaying implementation would increase the uncertainty for the taxpayer that we have been urged to remove, especially by the City of London. It would also cost the Exchequer at least £50 million in 2009-10.
	In addition, the drafting of those amendments would mean that all transitional arrangements to protect remittance basis users during the move to the new rules would be lost—for example, successful alienations of income or gains and the grandfathering of mortgages. We cannot support any amendment that delays implementation and causes uncertainty or, as in this case, introduces retrospection into the legislation.
	Throughout our consideration of the Bill, we have had detailed and considered debates, in which hon. Members have raised important issues and presented serious arguments. We have listened carefully to their arguments and those of representative bodies. We have tabled a number of amendments to address those concerns. I accept that this may not have been the most perfect route by which to have made these changes, but I put it to the House that, by doing so, we have brought to an end the review that had been running for a long time and that was in itself a cause of uncertainty.
	I believe that this is now a good package that underpins the long-term base of the remittance basis rules. I thank hon. Members for their careful consideration of these issues and, as I have said repeatedly, the representative bodies for the time that they have given to HMRC and Treasury officials over the past few months. I commend the Government amendments and hope that, given the way we are taking these issues forward, the hon. Members for Fareham and for Taunton will feel that they need not press their amendments.

Madam Deputy Speaker: With this it will be convenient to discuss the following: Government amendments Nos. 31 to 33

Jane Kennedy: I beg to move, That the Bill be now read the Third time.
	Will you pass on my thanks, Madam Deputy Speaker, to the Chairman of Ways and Means and to all the Chairmen who helped us in Committee? I should like to thank all Members who participated in Committee of the Whole House, in Committee, and on Report over the past two days. They have closely scrutinised the major changes to our tax system that the Bill introduces. I also pay tribute to the Opposition parties' spokesmen and women, who have been extremely well briefed and meticulous in their pursuit of the detail. Although my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) is not in his place, may I say that he was missed by Finance Bill regulars? However, we were grateful for his contributions on the Floor of the House.
	The Bill supports our economy. Like the rest of the world, we are facing a tough time. The ongoing disruption to global financial markets and rising world food and fuel prices are international trends, but are having an impact in all areas of Britain. The rising price of oil is raising the cost of filling up the car and of gas and electricity bills, which have risen by more than 15 per cent. and more than 12 per cent. respectively in the past 12 months. The price of some staple foods has gone up even more steeply.
	However, our economy is well placed to respond to those challenges. Although inflation is rising, it is lower than in the USA or the eurozone and remains far lower than it was in the past; the same applies to interest rates. The UK has also benefited from more than 15 years of continuous growth and from 10 years in which income per head has risen faster than in any other country in the G7, taking us from the bottom of the table to second from the top. Crucially, there are now 3 million more people in work than there were in 1997. Employment is at a record high.
	We need to support families and businesses at this time, so the Bill delays the introduction of the fuel duty rise that was due to have taken place in April, as was discussed earlier this evening. The Bill also raises personal allowances for this year. We continue to look at the best way to continue to support those on low incomes in the future. My right hon. Friend the Chancellor has said that he will introduce proposals to do that at the pre-Budget report. We will continue to support families, but we also have to support Britain's businesses and to ensure that Britain remains a competitive place in which to do business.
	I need to mention a minor technical matter relating to the reduction in the rate of corporation tax. Owing to an unintended oversight, the rules for giving double taxation relief on foreign income did not get altered to reflect the reduction in the corporation tax rate. If that were uncorrected, some companies could face double taxation on a small part of a number of dividends received during this financial year. This technical matter obviously needs to be rectified. HMRC will discuss the solution with business representatives to find the best possible fix. We will then address the problem in next year's Finance Bill, with provisions backdated to 1 April 2008 to ensure that no income faces double taxation. In the meantime, HMRC will use its statutory discretion to give the necessary double taxation relief.
	Capital gains tax is being restructured and made significantly simpler, with an internationally competitive main rate of 18 per cent.—less than half what it was 10 years ago. The entrepreneurs relief that the Bill introduces will benefit 80,000 business owners and investors this year alone. The Bill also maintains the competitiveness of the UK's tax system for non-domiciles; the system is being made more sustainable because we are ensuring that the principle of paying tax only on income remitted here is not exploited or undermined. We are responding to the challenges that our economy faces and we are supporting families and businesses.
	The Bill addresses the challenges that the British economy faces. As I said, it supports British business and families, and I commend it to the House.

Nigel Evans: Some Members have commiserated with me for having an Adjournment debate at the end of a relatively late-night sitting. I was first elected to the House in the early 1990s, and I once had an Adjournment debate that started at quarter to 6 in the morning, so I know what late-night sittings are all about. This is relatively early for me.
	Duchenne muscular dystrophy is an important subject, and I am grateful to the hon. Member for Blaydon (Mr. Anderson), who is chairman of the all-party group on muscular dystrophy, for expressing a wish to contribute to this short debate. Duchenne muscular dystrophy is a severe and progressive muscle-wasting disease caused by variations in the dystrophin gene on the X chromosome, which results in the loss of the protein dystrophin in muscle cells. It primarily affects boys. The reason that I asked for this Adjournment debate is that, publicly and even inside the House of Commons, very little is known about the disease. I think that it would therefore be beneficial to give the House some short, practical information about it.
	Duchenne muscular dystrophy occurs in one in every 3,500 male births worldwide, and 100 children in the United Kingdom are born with DMD every year. Two children in the UK die every week as a result of the condition, and it is the biggest genetic killer in the UK. By the age of 11, most boys with the condition are confined to a wheelchair. Degeneration of the lungs means that boys with DMD need a ventilator to breathe. The muscles of the heart degenerate by the late teens, and the condition is severe enough to affect life expectancy. The average life expectancy among boys treated for DMD is the mid to late-20s. Likely behavioural characteristics are limited social skills, attentional deficits and depression. There is no cure at present.
	On 31 October 2007, the Prime Minister's office issued the following statement, also printed on the front page of the Action Duchenne booklet, which accompanied the lobby of Parliament just a few weeks ago:
	"The Government fully accepts that everything possible needs to be done to bring an end to the tragic impact Duchenne Muscular Dystrophy has on individuals and their families".
	The work of the charity Action Duchenne has secured £2.2 million of Government funding for the MDEX project and its research. Of that amount, the Minister of State, Department of Health, the right hon. Member for Bristol, South (Dawn Primarolo), had this to say in a letter sent to an Action Duchenne parent on 7 January 2008:
	"The £2.2 million granted to the project represents a significant and appropriate investment in view of the fact that the research is still at a relatively early stage and there are competing demands for resources. We are therefore not in a position to commit further funding to this project at this time."
	At this moment in time, there are only two research centres of excellence in the UK—one in London, the other in Newcastle.
	I have long been aware of DMD as a condition, but I was not aware by any stretch of the imagination of the impact it has on families or of the severity of the disease. At a recent lobby of Parliament by Action Duchenne, I met my constituent, Bernard Mooney, whose son Ben is seven years old and has DMD. Ben's prognosis is that he will be in a wheelchair by the end of primary school, becoming completely paralysed by his late teens, leading to a shortened life expectancy of around 20 years. Ben has been named as a suitable candidate for a trial of a new therapy at Newcastle's specialist DMD centre, which it is hoped will slow the wastage in his legs.
	The chief executive officer of Action Duchenne, Nick Catlin, has also contacted my office, as did a number of other people when they knew that my Adjournment debate was happening. Doron Rosenfeld has a son called Gavriel who is six years old and was diagnosed two years ago with DMD; his family were told that he would live to his early 20s and that there was no cure. It is a harsh reality for any parent to face—that your child will degenerate in front of your very eyes—but the situation is not as definite as the Rosenfelds were told. Research is close to making a major breakthrough. As a consequence, Doron and Kerry, his wife, have set up the GM Trust.
	I hope that everyone listening to the debate or who reads it in  Hansard will take some time to visit the website www.thegmtrust.org where they will find an amazing film. If they contact the site administrator for a password, they will gladly be supplied with it. I would like to take this opportunity to thank Lord Attenborough for his contribution to the video. The significant weight that he has put behind this project will ensure that those who are unaware of the particular condition will get a better understanding of what it is all about.
	In part of that film a man called Mark Styler is interviewed about his life with DMD. He talks movingly about living a life of "reasonable quality", while being barely able to breathe and almost completely paralysed through muscle degeneration. Every breath is a struggle, aided by a respirator, but his positivity and attitude were amazing to behold. I was humbled by watching the video. He said that he decided that it was not the quantity but the quality of life that mattered. Sadly, he died recently at the age of 34, but he was able to live that relatively long life because of the advancement in his treatment.
	DMD is an incredibly severe disease. The impact on the child is sadly there before our eyes and the impact on the parents is just as real and terribly painful. Doron Rosenfeld told me that it was "all consuming". We have a moral obligation to do whatever we can to advance the treatments for DMD. We cannot let the issue be brushed under the carpet—a phrase that my office has heard from a number of the people who contacted us.
	DMD is, as I have said, the biggest genetic killer in the UK and £2.2 million is simply not enough to ensure that we are doing our utmost. The GM Trust alone has raised more than £1 million in the last year. Doron and Kerry Rosenfeld are an inspiration, but they would be the first to say that they have received tremendous support from the local community. Anyone who sees their son and knows of the story of DMD is only too happy to support the cause. One lady who contacted me about her grandson who has DMD has helped to raise £23,000 over the last few years just through local charity nights. I congratulate her and everyone else who has got involved in these campaigns.
	Those who have loved ones suffering from DMD feel that the Government are simply not doing enough. I realise that there are competing demands for funds in all fields of medicine, but we are talking about children who, in many cases, are failing to live past the age of 20. It is unacceptable that, in 2008, we should turn around and tell them and their parents that there is no cure. We should be funding research in current projects and clinical trials. The 100 boys who will born with the disease in the United Kingdom in 2009 should not be told that nothing can be done. Words of sympathy from Ministers will simply not be sufficient. There needs to be a commitment to further funding, to increased funding, and to ensuring that the funding is ring-fenced for DMD.
	There is always—rightly—an outcry when children are killed on the roads. However, a huge amount of money is available for road safety, and children are taught at an early age about the dangers of crossing the road. In 2007, 121 children were killed on the roads. We would not think of telling their parents that there was nothing we could do about road safety. It is also entirely unacceptable that there are only two centres of excellence devoted to DMD.
	Ben Mooney lives in Clayton-le-Dale in my constituency. Every six months, his parents are faced with either a three-and-a-half-hour journey to Newcastle or a four-and-a-half-hour drive to London for his check-up. They are not alone, but the reason they need to undertake that journey is the lack of a translational network across the United Kingdom. I do not know how we can justify asking parents and children to travel those distances, particularly given the children's condition. Perhaps it is easier when the children are aged six or seven, with no noticeable signs of DMD, but when they become wheelchair-bound, transport for a family becomes even more difficult.
	As the disease progresses, Ben will need constant care on the journey, which means that both parents must take time off work. I am amazed that families such as the Mooneys have no other option. I should like the Government to commit themselves to a workable, translational network of care. A centre in the new hospital that I believe is being built in Manchester would be a good start. The Department of Health must ensure, especially in the current climate, that local GPs know about DMD, and that information is available to them so that they are in the best possible position to offer advice to families. I fear that too many GPs are made aware of advances by parents after those parents visit Newcastle or London. That should not be the case.
	This highlights the problem that there is no central push to tackle DMD and bring hope to families affected by it. We should not allow people to think that it is everyone for himself; the Government need to take a strong lead by making a commitment to helping those families. As Professor Muntoni, a professor of paediatric neurology, notes in a film on the GM Trust website, things have changed dramatically in the last few years. Scientists are close to a breakthrough, and we genuinely can make that breakthrough happen more quickly. However, only the Government can provide the catalyst for advancement. I know that simply throwing money at the problem is not the solution, but a proper and structured investment programme, coupled with a translational network across the UK, will make an enormous difference.
	I should be grateful if, having heard what I have said, the Minister would agree to meet me, along with a small delegation, to discuss DMD, so that those people's concerns and hopes can be aired and we can make progress. It would be a small step, but a welcome one, although it would be just for the short term. In the longer term, I should like the Government to take some points away from the debate.
	First, funding for DMD research and clinical trials must be increased and ring-fenced. Secondly, families must have better access to treatments and specialists, which means expanding the models of Newcastle and London to create a better translational network across the UK. Thirdly, the profile of DMD must be raised both publicly and in the NHS. Parents should not be forced to seek information; it should be readily available.
	This is, of course, not a party political topic, or one on which to score points. I did not realise the severity of DMD until Bernard, Ben's father, came to see me. I applied for the debate because I felt that we ought to know about DMD. The House has now heard about its effects, what children who suffer from DMD and their loved ones are going through, and what could be done about it. These proposals need serious consideration. We have a moral obligation. I believe that not enough is being done now, and it would be shameful if we did not reassess the steps that we have taken so far and ensure that we do more. Parliament is realising what a serious issue this is. The right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) approached me only yesterday and spoke very movingly of a constituent whom he has met and who suffers from DMD.
	Ben Mooney and Gavriel Rosenfeld are adored by their parents, who would do anything for them. They are not alone. It is high time that we did more to help them